Update: AMD Board Approves Acquisition of ATI, Bankers Confirm
July 22, 2006 12:20 AM
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Reports claim a $5.6B deal is about to close on an unprecedented merger
According to a report in
The Globe and Mail
board of directors at AMD has allegedly approved the takeover of Canadian graphics firm ATI Technologies
. The report claims that the information was released by an investment banker that was part of the discussions. According to other sources, AMD executives were also seen at ATI's headquarters in Markham, Ontario. The report indicated that AMD is considering a
$5.6 billion takeover bid for ATI
Speculation and rumors have run rampant over the last several months about the possible merger between AMD and ATI, but no concrete details have been revealed. According to reports on ATI's share prices, the company's shares have been trading at double the usual volume today. Analysts said that AMD would be making an offer of 20 to 40 percent premium to ATI's current share price. ATI shares traded at $16.12 on the NASDAQ today during after hours, which is up 39 cents from yesterday's closing.
has also picked up on the story
, claiming that "Some analysts have questioned the rationale for an AMD-ATI merger, and others were surprised that the speculation received no attention from analysts during AMD's earnings conference call on Thursday."
had punched in for question during the
investor conference call on Thursday
, but a moderator would not respond.
According to Eric Gomberg, an analyst for investment bank Thomas Weisel Partners, "there has been considerable industry speculation that AMD may pursue an acquisition of ATI Technologies, although such an outcome is by no means certain." Gomberg's comment came in earlier this week, but word circulating around investment bankers who are aware of the talks between ATI and AMD surfaced just several hours ago.
Recent reports indicated that Intel roadmaps
no longer included ATI chipsets
. Although Intel had been producing motherboards using ATI logic, upcoming boards like those that support Core 2 processors are void of any chipset from ATI. Interestingly, ATI and Intel had agreed to several cross-licensing programs that allowed them to take advantage of some of each other's technologies. Several analysts however, indicated that the merger between AMD and ATI to be "out of strategy for AMD and out of focus. Stupidity is no barrier to tech mergers."
A report in the
Wall Street Journal confirms the talks between AMD and ATI
(subscription required) today. Although the deal is not final, the report said that representatives from both companies declined to comment.
AMD has previously indicated that it would embrace embedded processor technologies for its
platform -- some of which would include
math and physics co-processors
. However, the company has recently
exited all non-x86 processor design
AMD and ATI jointly announced the confirmation of the $5.4B merger today (July 24, 2006)
This article is over a month old, voting and posting comments is disabled
I was hoping it wasn't true..
7/22/2006 12:33:45 AM
This can be argued in any direction, but I feel this would hinder the growth of the computer industry. No longer will Nvidia be making good chipsets for AMD(as stated by the CEO, they would lessen support if it was true). On top of that who's to say that AMD will let ATI will still allow chipsets to be made for Intel cpu's....this is just great...
So basically, unless or until other companies muscle their way back in(ie: via), you are pretty much going to have less choices for AMD systems and Intel systems when it comes to chipsets, and and graphics(built in and dual card setups).
RE: I was hoping it wasn't true..
7/22/2006 11:22:07 AM
Well, what choice would nVidia really have? Intel is no better. Look at the Core2 Duo launch, only Intel will have the first chipsets available. I guess AMD wants their own propriatary chipset.
I guess on positive note, AMD might be able to use better process technology on ATI's GPUs. Smaller, faster, cooler?
"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer
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